Wednesday newspaper round-up: Brexit debate, euro budget, BoE, fracking

The eurozone’s two biggest economies, France and Germany, have agreed to set up a common budget for the currency bloc marking a major step towards greater integration. The move, long championed by France and backed by the world’s lender of last resort, the International Monetary Fund (IMF), was decided by the two countries’ leaders Emmanuel Macron and Angela Merkel after talks on Tuesday. The exact size and structure of the fund has not been agreed but is set to be introduced by 2021. - Telegraph

A Labour government would task the Bank of England with improving Britain’s productivity growth under plans announced by John McDonnell today. The shadow chancellor will set out proposals for the party to sign an accord with the Bank at the start of a Labour government setting out how each will work to grow the UK’s output per hour. - The Times

A leaked HBOS report into a fraud in the lender’s Reading office has raised allegations that senior bankers and auditors helped to cover up a £1 billion criminal scheme that affected hundreds of business customers. The five-year-old report written by a former HBOS manager alleged that executives at the lender were aware as far back as 2004 of a potential fraud in the turnaround unit that last year led to the convictions of six people, including two former employees of the lender. - The Times

Billionaire Jim Ratcliffe’s petrochemicals giant Ineos has failed in its attempt to overturn Scotland's effective ban on shale gas fracking. After months of legal wrangling Court of Session judge Lord Pentland threw out the group’s call for a judicial review of Holyrood’s indefinite moratorium on hydraulic fracturing because ministers have not technically put a ban in place. - Telegraph

The Chinese authorities have orchestrated an arms-length rescue for the giant aviation and investment group HNA, heading off a fresh liquidity crunch for one of the world’s biggest debtors. The move came as the People’s Bank of China (PBOC) announced that it was setting up a special “financial risk tracking unit” to monitor local and international conditions after a surge in the number of corporate defaults in the country. - Telegraph

The money that Asian buyers are spending on office blocks in the City of London has reached a record high, as capital from Hong Kong and China pours into Britain. About £3.4 billion of Asian capital has been invested in City offices this year, according to Savills, the property consultancy. That is 70 per cent of the total volume and a record high for the first six months of a year. - The Times

World Cup barbecues may be under threat as beers, fizzy drinks and meat producers warn of potential shortages caused by a lack of CO2. The British Retail Consortium has written to major retailers informing them that drinks and meat supplies could be affected as at least one UK gas supplier has had to ration orders, with an industry source saying Britvic was being affected. - Guardian

MPs have been warned that the £12 billion merger of J Sainsbury and Asda could have “unintended consequences” that will hit British farmers and smaller suppliers hard. Lord Haskins, the former chairman of Northern Foods, said he believed that the tie-up could “inescapably and powerfully” affect vulnerable, independent producers. - The Times

Sky News would be guaranteed at least £100m a year in funding for 15 years under new concessions agreed by 21st Century Fox to secure government approval for its attempted takeover of Sky. In a deal with Culture Secretary Matt Hancock, Sky News would be spun off and handed to Disney as part of a Murdoch takeover of Sky. - Telegraph

More than a quarter of all construction workers in London are from the European Union, according to new figures. Across Britain, 10 per cent of the 2.2 million construction workers employed between 2014 and 2016 were non-British EU citizens or non-EU citizens. In London, 28 per cent of workers at building sites were from the EU. - The Times

Dialog Semiconductor confirmed it is in talks to buy touchpad technology company Synaptics as it seeks to wean itself off Apple amid concerns the iPhone maker will ditch the company to produce its own power management chips in-house. Reading-based Dialog said it was proceeding with due diligence and "detailed discussions" in connection with the potential acquisition of Synaptics. - Telegraph

A rogue employee who may have been working for Tesla’s enemies conducted “extensive” sabotage of the company’s operations, Elon Musk has claimed. In an email to employees, the co-founder of the electric car company said he had been “dismayed” to learn that a disgruntled staff member changed the code of Tesla’s IT systems and passed large amounts of highly sensitive data to unknown third parties. - The Times

Canada will become the first G7 nation to legalise recreational marijuana this year, creating a multibillion dollar market and a tax haul estimated at C$400 million (£228 million). The law is expected to change by September after Justin Trudeau, the prime minister, said a ban was “not preventing young people from having easy access to cannabis” and added that a regulated market would “better protect communities and children”. - The Times